Fund-Raising Before House Vote Draws Scrutiny

WASHINGTON — Lawmakers take contributions every day from corporate executives and lobbyists hoping for their votes. The question of whether that represents business as usual in Washington or an ethics breach is at the heart of a far-reaching Congressional ethics investigation that is stirring concerns throughout Washington and Wall Street.

The Office of Congressional Ethics has sent corporate donors and fund-raising hosts more than three dozen requests for documents involving eight members who solicited and took large contributions from financial institutions even as they were debating the landmark regulatory bill, according to lawyers involved in the inquiry.

The requests are focusing on a series of fund-raisers last December, in the days immediately before the House’s initial adoption of the sweeping overhaul, which could win final approval this week. Some of the fund-raising events took place the same days as crucial votes.

For example, on Dec. 10, one of the lawmakers under investigation, Representative Joseph Crowley, a New York Democrat who sits on the Ways and Means Committee, left the Capitol during the House debate to attend a fund-raising event for him hosted by a lobbyist at her nearby Capitol Hill town house that featured financial firms, along with other donors. After collecting thousands of dollars in checks, Mr. Crowley returned to the floor of the House just in time to vote against a series of amendments that would have imposed tougher restrictions on Wall Street.

That same day, Representative Tom Price, a Georgia Republican on the Financial Services Committee, scheduled what he called a “Financial Services Luncheon” at the Capitol Hill Club, as part of a fund-raising push that netted him nearly $23,000 in contributions from the industry in a two-month period around the vote.

In an area where the rules are murky, the investigators are taking an aggressive stance on what constitutes unethical conduct. The independent ethics office, led by a former federal prosecutor, has clashed repeatedly with lawmakers on the House Committee on Standards of Official Conduct, who have accused it of over-reaching. Given this history, observers believe it is unlikely that the committee will admonish any members, even if the investigators recommend action.

Some lawyers advise politicians to forgo fund-raising events in the midst of debates to avoid an appearance problem.

In 2004, the House ethics committee admonished the majority leader, Tom DeLay, for attending an energy industry fund-raiser just before an important decision on an energy bill. “A member should not participate in a fund-raising event that gives even an appearance that donors will receive or are entitled to either special treatment or special access,” a letter sent to Mr. DeLay said.

But the practice of soliciting donations in the midst of legislative debates remains common. In fact, dozens of members not included in the current inquiry scheduled fund-raising events in the weeks before the House vote, many of them taking donations from financial services companies. This year, as members of Congress furiously debated a regulatory bill and frantically raised money for critical midterm elections, fund-raising and lawmaking constantly intersected.

Given the pace of both, some in Washington said it would be impossible to swear off raising money while legislating.

“There are things going to the floor every day,” said Representative Melvin Watt, the North Carolina Democrat who is also a subject of the inquiry. “If this is going to be the rule, you can never do fund-raising.”

The exact focus of the investigation has been something of a mystery since word leaked in June that it was under way, perplexing lobbyists, lawyers and even the lawmakers being singled out.

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But lawyers knowledgeable about the investigation said those eight were picked in large part because in the 10 days immediately before the initial full House vote on the bill — which took place Dec. 10 — they solicited and received an unusually high proportion of campaign dollars from the financial sector. They received $140,000 in all, and at least seven of the eight, like Mr. Crowley, had fund-raisers during this period.

Julie Domenick, the lobbyist who hosted a house party to raise money for Mr. Crowley on Dec. 10, has been asked to turn over “all files, correspondence, e-mails, receipts, notes and any other documents” related to the party, as well as any contact she has had with Mr. Crowley’s campaign since early 2009, according to a letter she received. Others have received similar requests.

Besides the Crowley and Price fund-raisers, questions are being asked about a fund-raising breakfast the day before the vote that honored Representative Earl Pomeroy, Democrat of North Dakota, and was sponsored by a Washington lobbying firm.

“Congressman Crowley has always complied with the letter and spirit of all rules regarding fund-raising and standards of conduct,” a senior aide to Mr. Crowley said in a statement.

The offices of Representatives Pomeroy and Price did not return calls seeking comment.

The other subjects of the inquiry are John Campbell, Republican of California; Jeb Hensarling, Republican of Texas; Christopher Lee, Republican of New York; and Frank D. Lucas, Republican of Oklahoma.

The investigation will most likely continue until at least the end of August before an independent board made up largely of former members will decide whether to formally recommend further action by the House Committee on Standards of Conduct, which alone has the power to formally sanction House members.

But the effect is already being felt here.

“This is really a redefinition of the law,” said Kenneth Gross, a Washington ethics lawyer who is fielding some of the document requests from ethics investigators. “To pick eight members and say they voted on legislation and political contributions came in around this time is really going places that no regulatory authority has ever gone.”

Mr. Pomeroy was among the House Democrats who in December switched their stands in a way that favored Wall Street. He came out against a measure he had previously supported that would have given bankruptcy judges the power to force lenders to accept less money in foreclosures. Mr. Pomeroy ultimately voted in favor of the overall legislation last December, as did the other Democrats in the inquiry.

In Mr. Watt’s case, two days after his fund-raising event at the Democratic National Committee’s headquarters, he withdrew an amendment he had proposed that would have put financial transactions brokered by car dealers under new oversight. One donation Mr. Watt received at this time came from a political action committee controlled by General Electric, which has a business that provides financing for specialty vehicles such as forklifts and vans.

But Mr. Watt, as well as Representative Barney Frank, Democrat of Massachusetts and chairman of the House Financial Services Committee, vehemently rejected any suggestion that the decision to pull the amendment was related to contributions, saying instead that it was a political decision because they believed the measure was going to fail.

Correction: July 21, 2010

An article on Thursday about campaign donations to House members who were debating legislation on financial regulation described incorrectly financial services provided by General Electric. General Electric, whose political action committee made a donation to Representative Melvin Watt, a North Carolina Democrat, has a business, GE Capital, that provides financing for specialty vehicles such as forklifts and vans. GE Capital does not make regular consumer car loans.

A version of this article appears in print on July 15, 2010, on Page A18 of the New York edition with the headline: Fund-Raising Before House Vote on a Financial Overhaul Draws Scrutiny. Order Reprints|Today's Paper|Subscribe